The White House and the Federal Reserve are increasingly divided over the direction of U.S. interest rates. Vice President JD Vance has called the Fed’s refusal to cut rates "monetary malpractice," echoing President Trump’s demand for lower borrowing costs and his call for cuts of up to a full percentage point. Fed Chair Kevin Warsh, whom Trump tapped to succeed Jerome Powell, has instead raised the possibility of higher rates if inflation remains elevated. The federal funds rate has stayed at 3.50%-3.75% since December 2025, while inflation has remained above 4%, more than double the Fed’s longstanding 2% target. After Warsh’s Aug. 28 speech at the Jackson Hole economic symposium, market analysts estimated a 60%-79% probability of a quarter-point increase at the Federal Open Market Committee (FOMC) meeting scheduled for Sept. 15-16, 2026. A hike would lift the federal funds rate to 3.75%-4.00%, increasing pressure on credit-sensitive sectors including real estate, consumer finance and auto lending. The meeting is set to test whether the Fed will pursue its own policy path or respond to pressure from the White House.